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Tax Tips  - October 16, 2000

RRSP Withdrawl for Tuition Fees - Tax Free
Lifelong Learning Plan
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Starting 1999, taxpayers can withdraw funds from their RRSP's to pay for their own education or  spouse's education. This program is called Llifelong Learning Plan (LLP).

Under the LLP, taxpayers can withdraw up to $ 10,000 in a calender year, to a maximum of $ 20,000 over a period of up to four calender years. At the time of withdrawl, the person on whose behalf the withdrawl was made must be enrolled as a full-time student in a qualifying educational program of at least three months duration, or must have received an offer to enrol in such a program before March of the following year.

Amounts withdrawn under the LLP must be repaid to the individual's RRSP over a ten-year period begining no later than 60 days after the fifth year in which the funds were first received. The required repayment is based on the outstanding balance, with 1/10 being due the first year, 1/9 the second year and so on. Earlier repayments are required in the following circumstances.

Earlier repayments are required in the following circumstances if the individual: